Majority shareholders seek postponement of Oando’s AGM

• Allege abuse of corporate governance, financial mismanagement
The majority shareholders in Ansbury Investment Inc. have sent a petition to the Securities and Exchange Commission, seeking the postponement of Oando Plc’s Annual General Meeting (AGM).

In the petition dated August 17, 2017, Ansbury urged SEC to postpone the AGM, pending the resolution of the shareholding matter earlier raised by it.

Ansbury alleged that Oando was guilty of gross abuse of corporate governance and financial mismanagement.

But, Oando’s Chief Compliance Officer & Company Secretary, Ayotola Jagun, said the petition filed in Ocean and Oil Development (OODP), which holds 99 per cent and 56 per cent equity stake in Oando Plc lacked merit.

He said the issues raised had received the approval of the board and shareholders, adding that other matters highlighted by the petitioners could have been directed to the company for necessary clarification.

The Guardian learnt that the SEC had constituted a task force and started an investigation into the allegations against the oil firm.

It was further leant that a taskforce was convened on August 30, 2017, mandating Ansbury to prepare a detailed written submission stating the grounds upon which SEC should postpone the AGM.

The petition reads: “We remain fully determined to protect our corporate and contractual rights before all competent courts and arbitral tribunals. But, in light of the urgency of the matter and the fact that our company, as well as Oando might otherwise suffer irreparable harm from Ansbury’s impossibility to exercise its prerogatives of indirect majority shareholder, we respectfully request that the commission takes the appropriate steps to suspend the AGM.

“Or it should otherwise prevent the shares of OODP Nigeria from being voted until the appointment of Ansbury’s third ‘A’ director is confirmed and the SEC’s ongoing investigation into Oando is completed.”

Copies of petitions earlier sent to SEC made available to The Guardian on Monday, showed that Ansbury had on May 2, this year sent a letter to SEC, drawing its attention to what it described as clear violations of corporate practices by the company.

According to the petition, notwithstanding the ongoing severe financial situation of the company, the management keeps on increasing directors remunerations.

“For instance, it increased with respect to 2015 up to N1.9 billion. In the same year, the management had proceeded to liquidate part of the assets of the company and many are going to liquidated, and in particular, under the notes to the account, management intends to sell its participation in Oando Energy Resources in the name of restructuring or reestablishing the group going concern.

“This action and the progressive impoverishment of the group seems directed towards a liquidation of the latter more than the restructuring and reorganisation, taking into consideration the fact that both the strategy adopted by the management till now and the projected divestiture are not sufficient to service the existing debt,” the statement added.

Ansbury also expressed concern over what it described as strong uncertainty regarding the going concern status of Oando and the consistent loss N34.9 billion over two years period.

It noted that the N3.84 billion profits made by the company in 2016, which it said was generated from the sale of part of the group assets, would not be enough to fully repay the outstanding debt.

The company disclosed that Oando current liabilities as at December 31, 2016 far exceeded the current assets by N263.7 billion confirming serious financial imbalance from the previous financial year.

Based on these allegations, Ansbury requested that SEC should urgently intervene and adopt all measures deemed appropriate to protect the interest of investors, which is one of the mandates of SEC.

Jagun added that other matters highlighted by the petitioners could have been directed to the company and would have received the necessary clarification.

“Ansbury Inc (Ansbury) is not a shareholder of the company, but a shareholder in a company domiciled in a jurisdiction outside Nigeria which in turn holds shares in a Nigerian investment company that is a shareholder in Oando.

“On Alhaji Dahiru Mangal (Alhaji Mangal): He is an individual who requested clarification from the SEC on issues which he could easily have obtained from the company and indicated in his petition to the SEC that he holds a 17.9 per cent interest in Oando.

However, based on the company’s register of members, First Registrars Limited, he owns approximately four per cent of Oando Plc’s shares in his personal capacity. He is yet to disclose beneficial ownership of 13.9 per cent in accordance with Section 95 of the Companies and Allied Matters Act, Cap. C20 LFN 2004 (CAMA).

Failure to do so is a violation of CAMA and this has been flagged by the company in writing to Mangal and the SEC since May 24, 2017.”

He said as a public company listed on both the Nigerian and Johannesburg Stock Exchanges, Oando would provide full disclosure of the outcome as soon as the SEC enquiry was completed.